The Ministry's Guide to Business Operations in The Gambia

The Ministry of Trade and Industry’s  Guide to Business Operations in The Gambia

 

 

Author of the report

Dawda Barry – Lead Consultant

SpoTrend Consulting

 

19th July 2019

 

 

Contents

List of abbreviations/acronyms.. 3

1......... Introduction... 4

1.1...... Background. 4

1.2...... Purpose of this guidance and intended readership. 5

2......... Laws governing business operations in The Gambia.. 6

2.1...... Business Incorporation. 6

2.2...... Property Rights. 8

2.3...... International Trade. 9

2.4...... Taxation. 10

2.5...... Financial Services. 11

3......... Overview of the business regulatory processes.. 12

3.1...... Business Incorporation. 12

3.1.1     Registering a business in The Gambia. 12

3.2...... Property Rights. 15

3.2.1     Leasing a property. 15

3.2.2     Owning a land. 17

3.2.3.    Registering a leased property. 18

3.2.4     Obtaining a development permit 19

3.3...... Paying Taxes. 21

3.3.1     Taxation on individuals and businesses. 21

3.4...... International Trade. 34

3.4.1     Customs. 34

3.5...... Infrastructure Services. 36

3.5.1     Port Operations. 36

3.5.2     Food Safety. 38

3.5.3     Electricity Supply. 39

3.6...... Investment Facilitation. 40

3.6.1     Special Investment Incentives. 40

3.6.2     Domestic Investment Incentives. 41

3.6.3     MSME Investment Incentives. 41

 

 

 

List of abbreviations/acronyms

BAC

Brikama Area Council

BCC

Banjul City Council

CG

Commissioner General of Gambia Revenue Authority

DPPH

Department of Physical Planning and Housing

DTD

Domestic Tax Department

EIR

Equipment Interchange Report

EPLZ

Export Processing Zone License

ETLS

Ecowas Trade Liberalization Scheme

FSQA

Food Safety and Quality Authority

GIEPA

Gambia Investment & Export Promotion Agency

GRA

Gambia Revenue Authority

G2B

Government to Business

HACCP

Hazard Analysis and Critical Control Points

KMC

Kanifing Municipal Council

LTU

Large Taxpayer Unit

MSME

Micro, Small and Medium Size Enterprise

NAWEC

National Water & Electricity Company

NEA

National Environment Agency

PAYE

Pay As You Earn

SAD

Single Administrative Document

SIC

Special Investment Certificate

SWR

Single Window Registry

TIN

Tax Identification Number

WTO

World Trade Organization

1.Introduction

The Gambia is a small, open economy with a long trading history. It is the smallest country on the continent, surrounded by Senegal and with a 60 km Atlantic coastline that has led to it being known as the “Smiling Coast of Africa”. The Gambia harbours a wealth of land, coastal, marine and wetland habitats and species of local, national, regional and global significance, making it an attractive investment and tourist destination.

 

The country has a population of 2 million, with an average growth rate of 3% per year over the last decade. With 177 people per sq. km, it is one of the most densely populated countries.  While the proportion of households living below the poverty line is 31.6% in urban areas, the proportion rises to 69.5% for rural Gambia. The rural areas account for 43% of the country’s population, but they hold 60% of its poor.  Most of the population (57%) is concentrated around urban and peri-urban centres.

 

Gross domestic product is powered by services. The contribution of services to gross domestic product (GDP) stands at over 60%. Beyond wholesale and retail trade, including re-exportation to neighbouring countries, the services sector also includes tourism, the fastest-growing sector in the economy, which alone accounts for around 8% -9%[1] of GDP and a fifth of all formal jobs (the second highest nonfarm labour employer after the Government).

 

The large majority of Gambians still depend on agriculture for their livelihoods. Agriculture accounts for close to 30% of GDP and is the country’s major employer, with over 75% of the population engaged in subsistence and cash crop farming. The sector also delivers 50% of national food requirements and 70% of export earnings generated domestically. The main cash crop, groundnuts, represents 60% of domestically produced exports. Other than groundnuts, commercial farming has been largely limited to horticulture, sesame and cotton.

1.1Background

A favourable business environment is essential to creating the opportunities and incentives for domestic and international business entry, growth and competitiveness. The private sector thrives in a regulatory environment that creates a level playing field for businesses, and that allows businesses to efficiently register; obtain essential approvals and permits; manufacture or trade their products and build productive facilities.

Government regulations on business start-up, licensing, standards and inspections are important instruments that play a decisive role in creating a predictable and transparent environment for businesses while protecting consumers, public health, and safety. By improving regulatory processes that increase transparency and eliminate unnecessary administrative tasks, the government reduces the costs of monitoring compliance.

Despite some improvements, the regulatory burden remains a key impediment for Gambian MSME businesses throughout their business lifecycle, from business entry and growth to upgrading and competing in the international market. Improving clarity and predictability is paramount, and strengthened institutions are also required to formulate regulations related to investment.

The Gambian legal and regulatory framework is generally open to FDI, and the Government has made efforts to attract investment. Foreigners can invest in all economic sectors, and with few exceptions, the laws and regulations pertaining to investment apply equally to local and foreign investors.

1.2Purpose of this guidance and intended readership

This document provides potential investors (foreign and domestic) with practical guidance to:

  • basic procedures in their dealings with national institutions;
  • understanding relevant business laws and regulations that are in force; and
  • communicating Government to Business (G2B) service delivery across national institutions.

 

 

 

 

 

 

 

 

 

 

 

 

2.Laws governing business operations in The Gambia

2.1Business Incorporation

  • Companies Act 2013

Purpose of the Act: To provide a unified legal basis for the incorporation, management and dissolution of companies.

 

Main provisions of the Act: The Minister of Justice appoints the Registrar of Companies. Any two or more persons can incorporate a company by complying with the requirements of the Act. An incorporated company can be a company (i) limited by shares; (ii) limited by guarantee; and (iii) unlimited company. A company can be incorporated once the Memorandum and Articles of Associations, notice of address of the registered office of the company, the consent of the Shareholders or Directors are registered by the Registrar.

 

  • Single Window Business Registration Act 2013

Purpose of the act: To provide for the establishment of single window registry for business services, and for streamlining business registration processes and facilitating business start-up.

 

Main provisions of the act: The Registrar of Companies is the Registrar and administrator of the single window registry. The single window registry provides registration services; maintain company and non-commercial registers; provide company incorporation and other services specified under Companies Act. A person cannot carry on a business under a business name unless the name was reserved and registered. The single window registry processes applications for taxpayer registration, employer registration and trade licenses.

 

  • Social Security and Housing Finance Corporation Act 2015

Purpose of Act: To provide the legal basis for the collection, management and administration of the social security and housing finance funds. The Corporation is mandated to manage and administer all moneys, securities and other assets received by it.

 

Main provisions of the Act: In the case of Social Security Fund, the Corporation initiates investment policies that will yield reasonable returns to the members and make provisions for social protection to its members. For the Housing Finance Fund, the Corporation finances housing development projects in the Gambia, make direct investment in housing and real estate projects. All employees are obliged to contribute 5% of their salary or wages to the social security fund and employers contribute 10% of the salary or wages of the employee to the same fund.

  • Injuries Compensation Act 1990

Purpose of Act: To make provision for compensation to workers for injuries suffered during the course of their employment.

 

Main provisions of the Act: An employer is required to pay to the Injuries Compensation Fund 1% of the total monthly earnings of the worker, not exceeding D15/month in accordance with the Act and the Injuries Compensation Fund Regulations of 1996. Failure to make this payment shall be liable to payment of interest on the sum due at the prevailing commercial lending rate.

The Board of Trustees of the Fund consist of the Board of Directors of SSHFC and the Commissioner of Labor, who is also appointed as the Commissioner of the Fund.

 

 

 

  • Insolvency Act 1997

Purpose of the Act: To consolidate insolvency both for companies and individuals, the regulation of insolvency practice, public administration of insolvency and the licensing of insolvency practitioners.

 

Main provision of the Act: The court can put a company under administration if satisfied that the company is likely to become unable to pay its debt obligations. The administrator of a company is appointed by an administration order. The administrator manages the affairs, business and property of the company.

 

  • Labor Act 2007[2]

Purpose of the Act: To provide for the administration of labor, the recruitment and hiring of labor, and the protection of wages.

 

Main provisions of the Act: The act applies to all employment by any employer but does not apply to the civil service, security services and domestic servants. The act is administered by the Commissioner of Labor.

  • GIEPA ACT 2015

Purpose of Act: To promote and facilitate investments and exports, provide support for enterprise development and create a conducive business environment.

 

Main provisions of the Act: GIEPA is required to constantly review the business environment and recommend measures to remove obstacles to investment and enhance the investment climate; Promote and develop export potential of businesses and work with government institutions and private sector to create an investor friendly business environment.

 

 

 

2.2Property Rights

  • State Land Act 1991

Purpose of the Act: To provide the legal basis to improve and rationalize the land tenure system by the replacement of the customary tenue with a long term (99 years) leasehold system in designated areas of the country.

 

Main provision in the Act: All land in BCC and KMC is State land. The Minister may by order published in the Gazette designate selected areas as state land. The districts of Kombo North, Kombo South and Kombo Central were designated as state land in March 1994 in accordance with this act and the subsidiary legislation of 1994 [3].

 

  • Physical Planning and Development Control Act 1991

Purpose of the Act: To provide a unified legal basis for preparation and approval of physical development plans and control of developments including buildings and for creating a better environment and proper use of land in The Gambia.

 

Main provision in the Act: No developments should be started without obtaining a building permit from the Department of Physical Planning and Housing and all developments should be in accordance with the provisions of the act and subsidiary regulations.

 

  • General Rate Act 1992

Purpose of Act: To provide the legal basis for consolidation and rationalization of the collection of rates by Local Government Councils. Designated rating authorities include the Banjul City Council, Kanifing Municipal Council and Respective Area Councils.

 

Main provision of the Act: Every rating authority has power to make and levy general rates on the basis of an assessment in respect of the value of the property in its rating area for the purpose of public nature. The rates are meant to cover expenditures incurred by the authority during the period the rate is made.

 

Purpose of the Act: to provide for the public registering of deeds, conveyances, wills, contracts and other instruments that may affect any land, dwellings and hereditaments in The Gambia.

 

Main provision of the Act: The Registrar General administers the Registry. He/she is the legal custodian and issue certificates of registration on every instrument registered at the Deeds Registry.

 

  • Mortgages Act 1992

Purpose of the Act: To provide the legal basis for regulating contracts charging immoveable property as security for the due repayment of debt and any performance of debt obligations.

 

Main provisions in the Act: Evidence of the transfer or encumbrance of a mortgage or any interest in a mortgage or discharge of mortgage should be registered at the Registrar of Deeds in accordance with the Lands (Registration of Deeds) Act.

 

 

2.3International Trade

  • Customs & Excise Act 2010

Purpose of Act: To provide for the management and administration of customs, the imposition and collection of duties and taxes on imports and exports, the application of customs control and other related matters.

 

Main provisions of the Act: All imports and exports are subject to customs control. All goods specified in Part A of the 8th schedule of this Act is prohibited imports. Goods specified in Part C of the 8th schedule are prohibited for exportation. No person is allowed to manufacture excisable goods unless licensed by the Commissioner General. Perfumery, cosmetics or toiletries, cigarettes, cigars, tobacco and alcohol are regarded as excisable goods.

 

  • Food Safety and Quality Act, 2011

Purpose of the Act: To control the safety and quality of all foods (including water and beverages) and animal feed whether locally produced, imported or destined for export.

 

Main provisions of the Act: FSQA is the authority responsible for the overall official control of food safety and quality in the Gambia. Its work includes contributing to consumer health and safety, the facilitation of trade and control of fraudulent and deceptive food marketing, labelling and advertising practices. It ensures that food and feed comply with legal requirements, or where appropriate with approved codes of good practice; It carries out inspection, sampling and certification of food and feed for import and export when required; Inspect establishments, processes and products throughout the production and distribution chain.

 

 

 

2.4Taxation

Purpose of the Act: To provide for the establishment of the Gambia Revenue Authority to administer, assess, collect and to provide for effective and efficient administration of the revenue collecting system.

 

Main provisions of the Act: The Authority is under the general supervision of the Minister of Finance. The authority assesses, charges, levies and collects all revenue due to Government and advise the Minster on all matters relating to the administration and collection of revenue under the laws.

 

  • Income and VAT Act 2012

Purpose of the Act: To provide the legal basis for the management and administration of income and VAT, imposition and collection of taxes on income, supply of goods and services and imports.

 

Main provision of the Act: Income and value added tax is imposed for each tax year at the rate as specified in the Income and VAT Act 2012 on a person who has chargeable income for the year. The chargeable income of a person for a tax year is the gross income of the person for the year reduced by the total amount of deductions allowed to the person for the year under this Act.  VAT is a consumption tax levied on taxable supplies of goods and services in The Gambia and on goods imported. It is not a tax on profits.

 

  • Licenses Act 1992

Purpose of Act: To provide the legal basis for Licensing Authorities to regulate trading and to provide for the licensing of certain trades, professions and occupations. Licenses are issued annually, half yearly or occasionally, as the case may be. However, the license should specify the commencement and expiry date.

 

Main provisions of the Act: Licensing Authorities have power to issue license and, in its discretion may refuse to issue or revoke any such license. Wholesale, retail and general traders’ licenses shall enable the licensee to sell on the premises specified in the license in any quantity of goods or articles in which specific licenses are not required.  Hawker’s license has the same privileges and subject to the same limitations as a retail shop or petty trader license except that the licensee is not permitted to sell goods in any store or buildings occupied permanently or temporarily. The licensee is only allowed to sell from a vehicle or from a pack or basket or tray carried by him.

 

  • Stamp Duty Act 1998

Purpose of the Act: To charge stamp duties in respect of certain instruments such as Contracts, Leases, Bills of Exchange including promissory notes and hire purchase agreements, Bills of Lading, Conveyances, Mortgages and Deeds.

 

Main provision of the Act: Stamp duty is charged on the instruments specified in the schedule of this act. The Minister and the Commissioner General of GRA appoints the Commissioners of Stamp Duties who are responsible for managing the duties to be charged by virtue of the Act. An instrument liable to stamp duty cannot be registered under the Lands (Registration of Deed) Act until it has been stamped as required by this Act.

 

 

 

2.5Financial Services

  • Banking Act 2009

Purpose of the Act: To make provisions for the regulation of Banking Institutions, including Islamic Banking.

 

Main provisions of the Act: No local banking institution should carry out banking business without a license from the Banking Authority. Only companies incorporated under Companies Act or a foreign banking institution are issued licenses. A banking institution cannot be granted a license unless it fulfils the minimum capital requirements prescribed by the Banking Authority in line with this Act.

 

  • Central Bank Act 2018

Purpose of the Act: To consolidate the law relating to the establishment of the Central Bank, whose main objectives are to maintain price stability and promote the stability of the currency.

 

Main provisions of the Act: The Bank formulates and implements monetary policies; promote the stabilization of the value of the Gambian currency. The Central Bank regulates and supervises the financial system; promotes, regulates and supervises payment and settlement systems.

 

  • Security Interest in Moveable Property Act 2014

Purpose of the Act: To facilitate use of moveable property as collateral in order to improve access to credit, provide for the creation, registration and enforcement of security interests in moveable property.

 

Main provisions of the Act:Security interests in moveable property applies to all types of moveable property except for (aircrafts and ships, intellectual property, bills of lading, securities and household goods).  A security interest is created in moveable property by a security agreement. A security agreement can be oral if the security interest is to be in the possession of the creditor. If non-possessory, the security agreement must be in writing. The Central Bank, which is the repository of the registry appoints the Registrar.

 

 

 

3.Overview of the business regulatory processes

Effective business regulation provides MSMEs with the opportunity to grow and move from the informal to the formal sector. As such, it’s important to have effective rules that are easy to follow and understand.

The World Bank Group’s Doing Business measures the processes for business incorporation, obtaining a building permit, getting electricity connection, transferring property, paying taxes, engaging in international trade, enforcing contracts and resolving insolvency. It advocates for both regulatory quality and efficiency, and elimination of unnecessary red tape to encourage SMEs to flourish.

3.1Business Incorporation

 

3.1.1Registering a business in The Gambia

The Registrar of Companies is responsible for business registrations in The Gambia. The Registrar issues certificates of incorporation and business registration for foreign and local companies and certificates of registration for sole proprietorships and partnerships in accordance with the Companies Act 2013, Single Window Business Registration Act 2013 and Partnership Act

 

Firms must then obtain employer/employees registration of the National Provident Fund in accordance with the Social Security Act 2015 (employers contribute 10% of employees’ basic salary and employees contribute 5% of their basic salary); employers are also required to pay 1% of the total monthly earnings of the worker, not exceeding D15/month to the Injuries Compensation Fund in accordance with the Injuries Compensation Act 1990 and subsidiary regulations.

 

Firms must also obtain taxpayer registration with the Gambia Revenue Authority (GRA) in line with the Income & Value Added Tax Act 2012.

 

A Trade License should be obtained from the appropriate Licensing Authority depending on the business type in accordance with the Licenses Act 1992. All licenses for traders, certain professions and occupations in respect of the various Licensing Authorities are listed under the Second Schedule to the Licenses Act. (Refer to footnote 2 for guidance)[4]

 

The different broad categories of business that can be registered under the Laws of The Gambia include the following:

 

Sole Proprietorship Business  

  • Provide photocopy of identity card/passport of proprietor (owner of business);
  • Obtain a Tax Identification Number (TIN) if you do not have one;
  • Fill out Business Registration Form (SWR3) at Registrar of Companies at the Ministry of Justice;
  • Registration fee of D500;
  • Obtain Income Tax Clearance from GRA;
  • Obtain Employer registration from SSHFC;
  • Get issued a Business Registration Certificate by the Registrar of Companies;

 

Partnership business

  • Apply for a name reservation at the cost of D500;
  • Get a Legal Practitioner to prepare a Partnership Deed at a fee;
  • Pay stamp duty at GRA at D1,000;
  • Register the Partnership Deed at the Registrar General’s Office at D1,000;
  • Provide photocopy of identity card/passport of partners & their telephone numbers;
  • Obtain a TIN at GRA for the partnership business;
  • Fill out Business Registration Forms (SWR7) at Registrar of Companies at no cost;
  • Pay registration fees to Registrar of Companies: pay incorporation fees of D5,000 and registration fees of D1,00 for a general partnership; and incorporation fees of D10,000 and registration fees of D1,000 for a limited partnership;
  • Obtain Employer registration from SSHFC;
  • Get issued a Business Registration Certificate and Incorporation certificate, TIN and Registered Partnership Deed at the Registrar of Companies Office;
  • Obtain a Municipal Trade License from the Municipal Authority under which the business location falls.

 

Limited Liability Companies

  • Apply for a name reservation at a cost of D500;
  • Photocopy of identity card or passport of shareholders and telephone numbers. If any of the shareholders/directors is a non-resident, attach particulars of agent on his/her behalf in the Gambia;
  • Get a Legal Practitioner to prepare your Memorandum and Article of Association for a fee;
  • Obtain a TIN from GRA;
  • Obtain Employer registration from SSHFC,
  • Fill out Business Registration Form (SWR7) and pay registration fees of D1,000 at the Registrar of companies;
  • Make payment of Incorporation fees as follows:
    • Share Capital of up to D500,000………………………….. D10,000
    • D500,000 to D1,000,000…………………………………..  D15,000
    • Share Capital from D1,000,000 to D10,000,000……….   D20,000
    • Share Capital above D10,000,000…………………………D25,000
  • For the registration of a company limited by guarantee…………   D5,000
  • Get issued a Certificate of Incorporation and Business Registration by the Registrar of Companies at the Ministry of Justice;
  • Obtain a Municipal Trade License from the appropriate local municipal council.

 

Organisations/Associations

  • Get your constitution done preferably by a Legal Practitioner or Development Expert. This should spell out Members of the Executive Board and their specimen signatures;
  • Obtain a TIN from GRA
  • Obtain Employer Registration from SSHFC if providing contract employment as per the Laws
  • Pay the incorporation fee of D1,000 at the Office of the Registrar of Companies at the Ministry of Justice.
  • Get your organisation/association issued an Incorporation Certificate by the Registrar of Companies;

 

 

3.2Property Rights

3.2.1Leasing a property

The State Land Act 1991 has created institutions and procedures for Land administration in the country. This guide explains some of the basic issues involved in leasing a customary land and the procedures for applying for a lease, if the plot under customary tenure is in a State Land Area. Broadly, this guide addresses the following:

 

What is a State Land Area?

According to the State Land Act 1991 and subsidiary legislations of 1994, Banjul and Kanifing Municipal Council, the districts of Kombo North, Kombo South and Kombo Central and any other area designated by the Minister in a Gazette, is a State Land area, where all land including customary land (but excluding freehold) shall vest in and be administered by the State.

 

Who issues Leases?

Leases are issued by the Minister, upon the advice of the Department of Lands and Surveys.

 

Is it necessary to have a lease?

Yes. To maintain a land, one must have a lease. As soon as an area is designated as State Land Area, all people in that area holding customary tenure and year to year tenancy automatically become “deemed lessees” from the date of designation. A deemed lease means a person who has been holding customary land but from the date of designation, will be holding such land from the State for a period of 99 years. One is no longer called a customary land holder but a deemed lessee. One gets the title to the land only if one applies for a lease.

 

When and where should one apply for a lease?

One can apply anytime for a lease to the Department of Lands and Surveys after an area is designated as State Land Area. The 99-year term starts on the day the area is designated as State Land. The earlier one gets a lease, the longer the period of lease. However, the Minister will notify a time within which all deemed leases in a State Land Area should apply and obtain leases. If one fails to get lease within the specified time, one may lose the land.

 

People outside State Land areas can apply, as before, to the relevant District Authorities for their leases. But those leases will be only for a period of 21 years, as specified by the Lands (Regions) Act, Cap 10.

 

How should one apply for a Lease?

One should apply in a prescribed form which is available from the Department of Lands and Surveys upon payment of an application fee D500. The application should be accompanied by a certificate of ownership issued by the relevant Local Government Authority, location and site plans.

 

What should one do if there is claim of ownership on one’s land?

One should inform the Lands Commission who will look into the matter and where necessary seek the advice of the relevant District Tribunal.

 

How long can one wait to get a lease?

A soon as the application and all necessary supporting documents are received by the Department of Lands and Surveys.

 

If the Department is in doubt or if there is a dispute on the ownership of the land, the Department will refer the matter to the relevant District Tribunal.

After the ownership issue is settled, the application and supporting documents are sent to the relevant Department of Lands and Surveys for their advice on sub-division, Land-use, type and value of development applicable to the land or its sub-divisions.

 

The Department of Lands and Surveys will then inform on how the land should be used and whether it has to be sub-divided and surveyed.

 

One should then go to a registered private surveyor of choice and get the land surveyed and demarcated at own cost. The surveyor will get the survey plans authenticated by the Director of lands and Surveys. One then forwards the authenticated survey plans to the Department of Lands and Surveys who will prepare the lease documents for the Minister’s approval.

 

How much does one have to pay for a lease?

One would have to pay stamp duty of 5% of purchase price (for registration purposes) and a premium, which is calculated based on the land use and location. The premium covers the cost of infrastructure such as roads, drainage, water supply and electricity. One is also required to pay a survey fee fixed at D2,500, and the annual land rent. These are applicable to the whole land or to the sub-divisions which would be treated as individual leases.

 

What are the usual terms and conditions of Lease?

  • All leases will be for initial period of 99 years from the date the area is designated as State Land Area.
  • One pays land rent and premium as fixed by the Department;
  • One uses the land or its sub-divisions for the specified uses indicated in the lease;
  • Before one starts development of the land or sub-division one has to obtain a development permit and has to comply with the Developmental Control Regulations.
  • One will protect all survey marks and preserve existing tree as much as possible.

 

If one contravenes the lease conditions

The Department will serve notice asking to remedy the contravention in a specified period of time. If one fails to comply with the notice, The Minister upon the advice of the Department, will re-enter the plot and withdraw the lease documents.

 

Can the State re-enter one’s land?

Yes. The Minister can re-enter a plot for the following reasons:

  • Failure to apply for a lease within the specified period of time;
  • Failure to comply with the lease conditions for the whole land or its sub-divisions;
  • Failure to substantially develop the land within a period of two years
  • If a land or any of its sub-divisions is needed for public or planning purposes e.g. for Government or community use.

 

Will one be compensated if one’s land is re-entered?

As a deemed lessee, one will not be compensated for failure to apply for lease within a specified time period. One will also not be compensated if the land or any of its sub-divisions are re-entered for non-compliance of the lease conditions.  But if the land or any of its sub-divisions are re-entered for public or planning purposes, one will get compensation for the buildings and other improvements done on the land. One will not get compensation for the land.

 

3.2.2Owning a land

The State Land Act 1991 has created institutions and procedures for land administration in the country. This guide explains some of the basic issues involved in land allocation and how one should go about getting a plot of land in planned layouts in State Land Areas. This section addresses the following:

 

Who allocates land?

Land is allocated by the Minister of Local Government and Lands, upon the advice of the Department of Lands and Surveys.

 

What are the requirements for application of non- residential land?

In accordance with the provisions of the State Lands Act, 1991, an application for the grant of State land for a non-residential purpose shall include the following;

  • Filled application form (D50,000.00 non-refundable application fee); 
  • Preferred location and site plan of the plot of land;
  • Justification of the required area;
  • Business proposal;
  • Proof of funding;
  • Concept design and approximate cost of the proposed developments at the site;
  • Business registration certificate;
  • Clearance from the Ministry of Higher Education Research Science & Technology for a school;
  • Clearance from Gambia Import & Export Promotion Agency for International Investors;
  • Any additional information as may be required by the Department;

When does one have to apply for land?

Whenever a layout is ready for allocation, the Department of Lands and Surveys invites applications within specified period of time.

 

The State Land Regulations 1995 have also prescribed a new application form for Grant of State Land and one has to pay a prescribed fee for the same.    

 

Should one have to pay for the land?

Yes. One is required to pay the application fee (D50,000.00 non-refundable), survey fees, stamp duty (for registration purposes) and premium (to cover the cost of infrastructure such as roads drainage, water supply and electricity). One is also required to pay annual land rent after acquiring a lease. These will be specified in the letter of allocation, issued by the Department of Lands and Surveys.

 

When will one get a lease?

When all the requirements mentioned in the letter of allocation have been met, which includes a substantial development on the land allocated.

 

 

 

 

 

3.2.3. Registering a leased property

This topic lists the procedures involved in registering a leased property, assuming a standard case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute.

 

Application for ministerial consent to transfer leasehold property

The application should be submitted to the Department of Lands and Surveys. Because the State owns most of the land, the property is technically leased. The vendor buys and submits the application form for permission at the Department of Lands and Surveys. Application form costs D750.

 

The Department then conducts an internal search for other files connected with the property. These files need to be attached to the application. The application then leaves the Lands Department and goes to a different office within the Department of State for Lands. The Minister for Local Government and Lands indicates its approval and the application is sent back to the Lands Department.

 

The Director of Lands issues the letter of consent for the transfer of the property. The lease is usually for 99 years, with the option of another 99 years. The vendor also brings receipts showing that land rents have been paid up to date. The ministerial consent is required for leaseholds. With regular follow up it can be obtained within three months.

 

Preparation of Transfer Deed by a lawyer:

The vendor’s lawyer then prepares the transfer deed. Cost is usually 2-3% of purchase price (lawyer’s fees).

 

Title search by lawyer at the Office of the Registrar of Deeds:

The purchaser’s lawyer conducts a title search at the Office of the Registrar of Deeds within the Office of the Attorney General. The search costs about D200-D500, but this is usually included in the lawyer’s fees. Sometimes, the lawyer may need to conduct an additional search at the Lands Department if files are missing at the Office of the Attorney General.

 

Payment of Capital Gains tax and Stamp Duty

Capital Gains tax is paid at the Gambia Revenue Authority. Once permission has been received, the vendor must pay capital gains tax and the purchaser pays stamp duty at the Department of Income Tax. Details of permission are inserted into the transfer documents. Capital Gains Tax is 5% of the purchase price or 15% of the sale profit (whichever is higher).

 

Stamp Duty will not be accepted unless Capital Gains tax has been paid. Once paid, the purchaser will obtain receipts with proof of payment and the transfer deed will be stamped. The stamp duty is 5% of the purchase price.

 

Transfer deed is brought to the Registrar General’s Office for registration:

The transfer deed is given a serial registration number, entered into the registers. One copy is retained with the Registrar General, and another one is returned to the purchaser. Together with the original lease document, this document constitutes the new title. The registration fee is fixed at D1,500.

 

 

 

 

3.2.4  Obtaining a development permit

The Physical Planning and Development Control Act 1991 and Physical Planning Regulations 1995 stipulate that one should not commence any development without first obtaining a development permit.

 

This guide addresses the procedures to obtain development permit—including obtaining necessary licenses and permits, submitting all required notifications, requesting and receiving all necessary inspections and obtaining utility connections.

 

What is a development permit?

A development permit is an official permit issued by Department of Physical Planning and Housing (DPPH) to an applicant authorizing the development or work applied for. The Development Permit usually includes the conditions to be complied with and also a time period (usually two years) within which the development is to be completed.

 

Who issues a development permit?

The development permit is issued by the DPPH.

 

Consult and purchase the application for development permit (Form1)

To obtain a Development Permit, one has to apply in Form 1 or Form 1A to the DPPH. One should use Form 1A if one is building a low-cost dwelling and Form 1 for all other developments. These forms are available from the offices of the DPPH and the Development Control Unit. The application form should be attached with the specified Development Permit Fee and the following documents of ownership and plans:

  • Form 1
  • Building plans
  • Evidence of ownership

 

The development permit fee is calculated based on the size of the building. Currently, it is D10 per square meter for residential buildings; D15 per square meter for commercial buildings; D20 per square meter for institutional building; the application fee cost D200.

 

The application must be submitted with three complete set of building plans, elevations, cross sections of all buildings, site and location plans. For buildings of more than two floors these plans have to be designed by a qualified architect, civil engineer or quantity surveyor. Plans for other buildings may be drawn by a qualified or experienced building, architectural, civil engineering or planning technician.

 

For multi-floors or public buildings, one has to submit in addition to electrical and plumbing plans, structural calculations and other particulars as required by the Department. After the development permit is issued, one set of drawings will be returned to the owner, and this set of approved plans must be kept at the building site, open to inspection by the authorities.

 

The owner must also show evidence of ownership (photocopy of the title deed, lease document or certificate of occupancy) and land tax payment for landowners.

 

Obtain development permit from Development Control Unit (Form 2). Upon scrutinizing evidence of land ownership, land use, and building plans, the DPPH approves the application, and the Development Control Unit issues a development permit, which consists of the following:

  • Form 2
  • Approved plans, stamped and signed (one set);
  • Form 4, Commencement notice. The developer must complete and send Form 4 to the DPPH before starting any construction work;
  • Form 9, Notice of completion

 

Submit Commencement Form (Form 4)

Application should be submitted to the DPPH at the beginning of the construction works. As soon as one has obtained a Development Permit, one should notify the Department in Form 4, the date when work is to be commenced. One should also notify the dates when various stages of the work such as foundations, basement concreting, walls, roofs etc. would be started.

 

Receive inspection:

Development Control Unit has the right to inspect during construction. Often the inspection will occur if there is a problem reported or if the department suspects that the developer did not pay all the required fees. The developer does not need to request the inspection. There will be on average 2 inspections during the construction period.

 

Submit Form 9 to request the certificate of completion

When the work is completed, one should inform the Development Control Unit in Form 9 that one has completed the work, upon which the DPPH will give a Certificate of Completion (Form 10). The Department would then visit the construction site to issue a certificate of completion. It is unlawful to occupy a building without obtaining the Certificate of Completion.

 

Obtain certificate of completion

The Development Control Unit issues the certificate of completion. The certificate of completion is needed to obtain a water connection.

 

Can I develop a without a Development Permit?

NO, you should not commence any Development without first obtaining a Development Permit.

 

No development should be started without obtaining a Development Permit (the new name for Building permit) from the Planning Authority and all developments should be in accordance with the provisions in the Development Control Regulations.

 

What if I build without a development permit?

The Department issues an emergency stop notice in Form 7 and asks the developer to apply and obtain a Development Permit. It may issue a demolition order through Form 12 asking the developer to remove such work or structure within a specified time. Failure to comply with the terms of such notice, the Department can carry out the removal or demolition and recover the cost of such exercise from the developer.

 

Request water connection approval from NAWEC.

The developer must apply to NAWEC for water and sewage connection. Moreover, the developer must complete the works including a manhole within 3 meters of the plot boundary nearest to the sewer. After the application, NAWEC inspects the building site. The application fee of D500 is deducted from the connection fee.

 

Obtain connection to water services from NAWEC

Water Department: Cost is D8,200

3.3Paying Taxes

3.3.1Taxation on individuals and businesses

Income and value added tax is imposed for each tax year at the rate as specified in the Income and VAT Act 2012 on a person who has chargeable income for the year. The chargeable income is the gross income of the person for the year reduced by the total amount of deductions allowed for the year under this Act.

 

The following section provides an overview of the main taxes affecting business operations in The Gambia and include:

 

  1.  
  2.  
  3.  
  4.  
  5.  
    1.  

Corporation tax

Corporation tax is charged on the earnings of companies, partnerships or bodies of trust.  This could be based on the turnover or chargeable income.  All companies must use the accrual method of accounting for income tax purposes.  For partnerships and bodies of trusts, revenue and earnings can be accounted for on an accrual or cash basis.

 

Who is liable for corporation tax?

All companies, partnerships or bodies of trust operating in The Gambia are liable to pay corporation tax.  Those incorporated and controlled in the country are resident companies and are therefore, liable to pay corporation tax on all incomes. Non-resident companies, partnerships or bodies of trust are liable to pay tax only on the Gambian-sourced income. 

 

What is the corporation tax rate?

The corporation tax rate is the higher of:

  • 27% of net profit or
  • 1% of turnover on audited accounts; (2% of turnover for unaudited accounts).

 

How is corporation tax calculated?

The corporation tax is the applicable tax rate multiplied by the net profit/chargeable income or turnover.  All taxpayers must retain proper accounts, documents and records, and issue proper invoices and receipts for all transactions.  In determining chargeable income, the following are not allowable as expenditures or deductions:

 

  • The closing value of stock-in-trade on hand at year end.
  • Fines and penalties for violating laws, rules and regulations
  • Personal expenditures
  • Taxes, except those on fringe benefits
  • Bribes, tips and kick-backs
  • Business and personal entertainment
  • Depreciation and capital expenditure 
  • Gifts, Prizes and Donations.
  • Losses carried back

 

However, the following deductions are allowable:

  • The cost of stock-in-trade disposed in a tax year
  •  Business expenditures generating income
  • Contribution to qualified pension schemes
  • Capital allowance and amortisation
  • Pre-commencement expenditures
  • Bad debts relating to the business line
  • Losses carried forward within six years
  • Foreign tax credit provided in a tax treaty

 

For example, if company A’s turnover in 2018 was D5 million and the net profit was D1.5 million, then the tax liability, computed below, will be D405,000.

 

Tax Base Types

Tax Base Amount

Tax Rate

Tax Liability

Turnover (audited)

D5,000,000

1%

D50,000

Turnover (unaudited)

D5,000,000

2%

D100,000

Profit

D1,500,000

27%

D405,000

 

How often should a company, partnership or bodies of trust file returns and pay corporation tax?

The calendar year is the tax year.  However, a company can apply to the Commissioner General for a special tax year.  Companies are required to:

 

  • File returns annually through the self-assessment process;
  • Make quarterly payments on their quarterly turnover. 

 

The quarterly payments are credited to their tax liability at the end of the tax year.  The closing dates for quarterly payments are the 15th of the month following the end of the quarter.  The closing date for filing and payment of final tax liability is 3 months after the end of the tax year.

 

In addition, a taxpayer can apply to the Commissioner General for extension of time to file a corporate income tax return if they have paid at least 90% of the tax liability due.  The application should be made before the due date for filing.  Extensions cannot exceed 30 days and can only be granted once a year. 

 

How and where to file returns and pay corporation tax?

Companies under the Large Taxpayer Unit (LTU) should submit their corporation tax returns at the Kanifing Revenue Office.  All other companies should submit their corporation tax returns at the nearest GRA office.  Payments should be made at any GRA office or at any of GRA’s designated partner banks.

 

Objections & appeals of tax decisions

Companies not satisfied with any tax decision can, within 30 days, object to such decision through the Objection and Appeal process.  The process starts with objecting to the decision of the Commissioner General through to the Tax Tribunal and then to the High Court.

 

Who are exempted from corporation tax filing and payment?

All companies are required to file tax returns. 

 

However, only the following are exempted from corporation tax

  • Special Investment Certificate (SIC) and Export Processing Zone License (EPZL) holders for the specified duration;
  • Those qualified under double taxation treaties.

Are the payments made as final tax? 

  • The quarterly payments made are not a final tax but credited to the final tax liability for the tax year. 
  • Any shortfall should be settled within 3 months after the end of the tax year;
  • Any excess is applied to other tax obligations and the balance, if any, refunded if claimed.
  • In the allocation of tax credit, foreign tax credits are utilised first, followed by instalments paid during the tax year and then taxes withheld which are not final taxes;
  • Credits not utilised or refunded can be carried forward for a maximum of 3 years and used on a first-in first-out basis.

 

Offences

The following are offences punishable under the Income and Value Added Tax Act 2012.

  • Failure to maintain proper records
  • Failure to pay corporate tax
  • Failure to furnish corporate tax returns 
  • Giving false or misleading information
  • Failure to notify the Commissioner General for a change in business or address
  • Failure to recover tax from a person holding money on behalf of a taxpayer
  • Improper use of TIN
  • Obstructing revenue officers in the performance of their duty.

 

 

 

Personal Income Tax

Personal income tax is charged on the earnings of an individual and their businesses other than companies and partnerships.  This could be based on the turnover or net profits. 

 

Who is liable to pay personal income tax?

All individuals engaged in economic or income generating activities in The Gambia are required to be registered and pay personal income tax. 

 

What are the personal income tax rates?

 The rates of income tax imposed on the chargeable income of an individual or body of persons is as at 2018. 

 

No

Annual Taxable Income

Rate

1

D0 – D24,000

0%

2

D24,001 – D34,000

5%

3

D34,001 – D44,000

10%

4

D44,001- D54,000

15%

5

D54,001 – D64,000

20%

6

Above D64,000

25%

 

However, the actual tax liability is the higher of:

  • The tax on chargeable income of individuals, including business income tax as per the above table or
  • 1% of turnover for audited accounts; (2% of turnover in any other case).

 

However, if business turnover is under D500,000 per annum, then the tax liability is 3% of turnover.  This is a final tax, and businesses under this category are not required to file annual returns. However, a quarterly declaration and payment is required. 

 

How is personal income tax calculated?

The Personal income tax liability for any person is the applicable rate multiplied by the chargeable income.  All taxpayers must maintain proper accounts, retain relevant documents and records, and issue proper invoices and receipts for all transactions. In determining chargeable income, the following items are not allowed as deduction:

 

  • The closing value of stock-in-trade at year-end
  • Fines and penalties for violating the laws, rules and regulations
  • Personal expenditures
  • Taxes, except those on fringe benefits
  • Bribes, tips and kick-backs
  • Business and personal entertainment
  • Depreciation and capital expenditure 
  • Gifts and Donations
  • Losses carried back

 

However, the following are allowable expenditures:

  • The cost of stock-in-trade disposed in the year
  • Business expenditures
  • Contribution to qualified pension scheme
  • Initial and annual allowance and amortisation
  • Pre-commencement expenditure
  • Bad debts relating to the business line
  • Losses carried forward within six years

 

If the personal owner earns other taxable incomes, then it should be added to the business income before computing the tax liability. 

 

For example, if XX Enterprise’s turnover in 2018 was D1 million and the net profit is D200,000, then XX Enterprise’s tax liability will be D39,000 as computed below:

 

Tax Base

Tax Base Amount

Tax Rate

Tax Liability

Turnover (Audited)

D1,000,000

1%

D10,000

Turnover

(Unaudited)

D1,000,000

2%

D20,000

Profit

D200,000

  -

D39,000

 

For personal profits above D64,000 per annum, the annual personal income tax liability could be computed using the following formula: Personal income tax Liability = ((Profit – D64,000) * 25%) + 5,000[5]). 

 

How often should a taxpayer file returns and pay personal income tax?

The tax year is the calendar year.  However, a person can apply to the Commissioner General for a special tax year.  Personal income taxpayers are required to file returns annually. They are also required to make quarterly payments on account of their annual tax liabilities.  The quarterly payments are credited to their tax liability at the end of the year.  The closing dates for the quarterly payments are the 15th of the month following the end of the quarter.   The closing date for filing and payment of final tax liability is 3 months after the end of the tax year.

 

How and where to file returns and pay personal income tax?

Personal income taxpayers under the Large Taxpayer Unit (LTU) should submit their personal income tax returns at the Kanifing Revenue Office.  All other personal income taxpayers should submit their personal tax returns at the nearest DTD office.  Payments may be made at any DTD office or at any of GRA’s designated partner banks.

 

Are the payments made as final tax? 

  • The quarterly payments made by personal income taxpayers are not a final tax but credited to the actual tax liability for the tax year.
  •  Any shortfall is settled within 3 months after the end of the tax year.
  • Any excess is applied to other tax obligations and the balance, if any, can be refunded if claimed.
  • In the allocation of tax credit, foreign tax credits are utilised first, followed by instalments paid during the tax year and then taxes withheld which are not final taxes. 

Employment Income Tax (PAYE)

Employment income tax is charged on employment earnings through the Pay As You Earn (PAYE) system.  Employment income is any profit or gain arising from employment.  It includes wages, salaries, bonuses, leave pay, overtime payments, fees and allowances, commissions, termination and any other form of supplemental payment.  This includes payments of all types, including cash, cheques, and direct bank deposits to domestic or foreign accounts.

 

Who is liable to pay employment income tax?

Any employee who earns incomes above D2,000 per month or above D24,000 annually arising from employment in The Gambia is subjected to employment income tax.  Also, all residents in The Gambia who earns employment income outside the country are liable to pay employment income tax, subjected to the foreign source rule. 

 

What are the employment income tax rates?

Refer to the Personal Income tax Rates table.

 

How is the employment income tax calculated?

The employment income tax for any employment income earner is the applicable rates multiplied by the total employment income.  No deductions are allowed. GRA has tables available for employers to use to determine the proper amounts to withhold.

 

For example, if Mr. X earns employment income of D50,000 per month, then his income tax liability is computed as follows.

 

Taxable Employment Income

Tax Rate

Tax Liability

D2,000

0%

D0.00

D833.33

5%

D41.67

D833.33

10%

D83.33

D833.33

15%

D125

D833.33

20%

D166.67

D44,666.67

25%

D11,166.67

Total

 

D11,583.34

 

For employment incomes above D64,000 per annum, the monthly tax liability could be computed using the following formula: Employment Income Tax Liability = (Gross Employment Income – D64,000) * 25% +5,000)/12.

 

How often should an employer file returns and pay employment income tax?

Employment income earners are not required to file returns unless they have other sources of taxable income.  However, their employers are required to submit a monthly return and pay the tax withheld to GRA.  The closing date for payment of PAYE is the 15th of the following month.      

 

How and where to file returns and pay employment Income tax?

The payment of withheld employment income and the filing of returns are the responsibility of the employer and not the employee.  Employment income tax (PAYE) returns are submitted to and payments made at the nearest DTD Tax Office.  Payments can also be made at any of GRA’s designated partner banks.

 

Who is exempted from filing returns and paying employment income tax?

Employees are not required to file employment income tax returns if they have only one employment and if that is their only source of income.  The following are exempted from employment income tax;

  • Employment income of the President of the Republic of The Gambia
  • Non-Commission officers of The Gambia Armed Forces
  • Foreign diplomats
  • Government pensioners
  • Those exempted by the President and approved by the National Assembly
  • An employee earning employment income in a foreign country and is already taxed in that country.

 

All other employees are deducted the employment income tax (PAYE) and the employer should file returns and make the necessary payments. 

 

Is the employment Income tax (PAYE) paid as final Tax? 

Employment income tax (PAYE) is a final tax unless the employee has other sources of income.

 

 

 

 

 

Value Added Tax (VAT)

VAT is a consumption tax levied on taxable supplies of goods and services in The Gambia and on goods imported. It is not a tax on profits

 

What is the VAT Rate?

  • The standard VAT rate is 15 percent.  This rate is applied to all goods and services unless they are specifically exempted. 
  • Zero percent is applied to exports of goods and services. 

 

Who is liable to pay VAT?

All consumers of taxable goods and services in The Gambia are liable to pay VAT.  Equally all importers of taxable goods or services are liable to pay VAT.

 

How is VAT calculated?

All taxable supplies by a registered supplier are VAT inclusive.  For example, if a trader makes a taxable supply worth D1,150,000, then the VAT element is D150,000.  This is arrived at by dividing the selling price by 115% and multiplying it by 15%, the VAT rate (i.e. D1, 150,000/115*15).

 

How is VAT collected?

VAT is collected at the point of imports and also by registered businesses when taxable goods and services are sold domestically. Registered businesses then forward the collected VAT to GRA each month.

 

What are the exempted supplies?

Exempted supplies are goods and services that no VAT is charged on. This includes:

 

  • Basic foods such as rice, sugar, flour, cooking oil, onions, potatoes, etc;
  • Educational services;
  • Prescription drugs;
  • Medical, dental, veterinary and optical services;
  • Agriculture and aquaculture products, inputs and equipment;
  • Unprocessed agricultural and aqua cultural products;
  • Life and health insurance;
  • Financial services not rendered for a fee or commission;
  • Domestic transportation and ferry services, excluding transportation related to tourism;
  • Rental or supply of residential properties;
  • Monthly domestic electricity consumption below 1,000 kw/h and water below 250 cubic meters.

 

Who should register and charge VAT?

 

VAT registrants are required to:

  • Keep proper records of their business transactions;
  • Display their certificates of VAT Registration at all business premises;
  • Issue VAT inclusive of invoices and receipts.

What are the benefits of registering for VAT?

VAT registrants are able to claim Input VAT credits, implying that the VAT paid on any expenditure can be recovered from GRA.   

 

Can a VAT registrant de-register later?

YES.  A business that has been registered for 2 years and whose taxable turnover was below D500,000 for the previous 12 months can apply for de-registration. However, the registrant is required to have filed regularly within this two-year period.  Also, the Commissioner General can cancel a taxpayer’s registration if satisfied that they did not meet their reporting obligations. 

 

How often must a registrant file and make payment?

VAT registrants are required to file the prescribed VAT return form and make payments for all amounts due monthly. The due date for each month’s filing and payment is the 15th of the following month.  Import VAT is payable before the goods are released.

 

How and where to file and make payments?

VAT registrants can submit their VAT returns at any DTD office.  Payments due should also be made at any DTD office or at any of GRA’s designated partner banks.

 

Who is eligible for VAT refund?

  • Diplomatic missions and diplomats.
  • International Organisations
  • Non-Governmental Organisations
  • VAT registrants who incur more input VAT for three consecutive months can apply for refund to GRA. 
  • Registrants, where 50% of their supplies in the preceding 12 months are zero rated e.g. exporters. 

 

Who is exempted from VAT filing and payment?

As long as a business remains registered, they are not exempted from monthly filing and payment.  Even where there are no business transactions during a given month or no sales, a registrant is required to file a return.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental Income Tax

Rental income tax is imposed on a taxpayer who has a taxable rental income for the year. In other words, any rent income received by a taxpayer from a rented property is subject to the payment of rental income tax.   Rental income tax is accounted for on a cash basis.  

 

There are two different types of rental income;

  • Residential rental income and
  • Commercial rental income.

 

Residential property does not include hotels, guest houses, inns, boarding houses or similar establishments.

 

Who is liable to pay rental income tax?

All property owners who earn rental income from properties located in The Gambia are subjected to rental income tax. 

 

What are the rental income tax rates?

 The rental income tax rates are;

  • 8% for residential rent on the gross rental income earned;
  • 15% for commercial rent on the gross rental income earned.

 

How is the rental income tax calculated?

The rental income tax liability for any rental income earner is the applicable rate multiplied by the total rental income.  No deductions are allowed.

 

For example, if Mr. X earns residential rental income of D600,000 per annum and commercial rental income of D1,200,000 per annum, then his total rental income tax liabilities will be as follows; 

 

Rental income Type

Annual Rental Income

Quarterly Tax Liability

Annual Tax Liability

Residential

D600,000

D12,000

D48,000

Commercial

D1,200,000

D45,000

D180,000

 

 

How often should a taxpayer file returns and make rental income tax payment?

Filing for rental income tax is made annually in the prescribed form.  However, declaration and payments are made quarterly. Taxes on rental incomes received in advance are payable in the quarter in which the rental income is received.   The due date for quarterly instalment payments are the 15th of the month following the end of the quarter.  The due date for filing and payment of final tax liability is 3 months after the end of the tax year.

 

How and where to file returns and make rental income tax payments?

Returns for rental income tax are submitted and payments made at the nearest DTD Offices.  Payments can also be made at any of GRA’s designated partner banks.

 

 

 

Who is exempted from rental income tax filing and payment?

No rental income tax earner is exempted from filing or income tax payments except rental income on properties owned by

  • local authorities,
  • district authorities and
  • other government institutions. 

 

Are the payments made as final tax? 

Rental income tax is a final tax.  The quarterly payments made by the taxpayer are subtracted from the actual total liability declared at the end of the tax year.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Gains Tax

Capital gains tax is imposed on the disposal of a capital asset.  Capital assets include land, machinery, shares, interest in partnership, and any right, title or interest in the assets listed above, but excluding depreciable assets and stock-in-trade.  In simple terms, this means the tax imposed on the income derived from the disposal of one’s capital asset.     

 

Who is liable for capital gains tax?

Any person who disposes a capital asset in The Gambia is liable to pay the tax.  In addition, any Gambian resident who sells a capital asset outside The Gambia is liable to pay capital gains tax.

 

What is the capital gains tax rate?

The rate charged depends on whether the disposal is made by an individual or a company, partnership, trustee etc. 

  • For individuals, the capital gains tax rate is 15% of the gains or 5% of the selling price, whichever is higher
  • For companies, partnerships, trustees, etc. the rate is 25% of the gains or 10% of the selling price, whichever is higher. 

 

How is capital gains tax calculated?

The applicable capital gains rate is applied on the selling price or gains.The gain is the selling price less the purchase price, improvement cost of the asset and cost of disposal. The capital gains cannot be reduced by any capital losses on another asset.In addition, no carry forward of capital losses for setoff against future gains is allowed.Foreign capital gains tax paid in the country of origin can however, be granted as a tax credit to the extent provided in a treaty.The amount of foreign tax credit allowed is the lesser of the foreign tax paid or the Gambian capital gains tax payable.

 

For example, Mr. X sells a land for D2 million and incurred D20,000 as selling expenses.The land had cost him D1.5 million two years ago and he had spent D100,000 on it as improvement.The selling price = D2,000,000 and the capital gains = D380, 000 (i.e. D2, 000,000 – D1, 500,000 – D100, 000 - D20,000).Tax due is the higher of 15% of D380, 000 = D57, 000 or 5% of D2,000,000 = D100,000.Therefore, the capital gains tax liability is D100, 000.

 

When should a taxpayer file and pay capital gains tax?

A capital gains taxpayer should fill the prescribed capital gains tax return and make payments of the tax due within 15 days after the disposal of a capital asset.  Documents providing evidence of ownership cost and selling price should be attached to the return.

 

How and where to file returns and pay the capital gains tax?

Capital gains tax returns are submitted and paid at the nearest DTD Office in the Region where the taxpayer or the capital asset is resident.

 

Objections & appeals of tax decisions

Taxpayers not satisfied with any tax decision can, within 30 days, object to such a decision through the Objection and Appeal process.The process starts with the filing of an objection at the GRA through to an appeal to the Tax Tribunal and then to the Court of Appeal where necessary.

 

Who is exempted from capital gains tax filing and payment?

Any person who disposes a capital asset is required to file a capital gains tax return.  However, the following taxpayers are exempted from capital gains tax payment.

  • a capital gain on disposal of a capital asset by any person, if the gain does not exceed D18,000.
  • a capital gain derived by a local authority, district authority, Government institution, or charitable organization;
  • a capital gain on disposal of a private residence that was occupied by the taxpayer or their parents in the two years preceding the sale and where the full selling price is re-invested in another residential property within one year.
  • a capital gain on disposal of agricultural land that was utilized by the taxpayer or their parents in the two years preceding the sale and that the full selling prices is re-invested in another agricultural land within two years.

 

In addition, a taxpayer can apply to the Commissioner General for extension of time to file a capital gains tax return if they have paid at least 90% of their capital gains tax liability due.  The application should be made before the due date for filing.  Extensions cannot exceed 30 days and can only be granted once a year.

 

Are the payments made as final tax? 

The capital gains tax is a final tax.  Neither the gains nor the full selling price received will be subjected to further taxation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.4International Trade

3.4.1Customs

The Customs and Excise Act 2010 provide for the assessment of charges and collections of customs and excise. All imports and exports are subject to customs control. Unless customs entry is provided by the importer, goods are not allowed to be unloaded from vessel or aircraft.

 

Importation by Air, Sea and Land Borders

Any person wishing to import goods must declare to the customs office with the required supporting documents.

 

Clearance Documentation Procedure

  • Goods arriving in the Gambia shall be under customs control prior to clearance;
  • A declaration must be made by a customs clearing agent;
  • The declaration is then submitted for verification, documentation and payment;
  • The goods will be released from customs control after completion of all formalities. 

 

Documents to be submitted:

An import declaration form must be prepared and submitted to customs with the following documents:

 

  • Invoice (cost, insurance, freight)
  • Bill of lading or Air waybill
  • The certificate of origin (where a WTO rate is applicable), ETLS generalized system of preference certificates of origin (where a preferential rate is applicable).
  • Packing lists;
  • Licenses and certificates required by law;
  • Tax Identification Number.

 

What is a Single Administrative Document (SAD)?

This is the document an importer or agent uses to declare to customs.

 

Exportation by Air, Sea and Land Borders

An exporter wishing to take out goods or services from The Gambia to a foreign country must declare to the relevant customs office and regulatory agencies for the licenses and certificates required by law.

.

Clearance document procedures

  •  An exporter needs the services of a clearing agent to prepare an export declaration;
  • Export clearance procedures are also necessary when an individual wish to export goods for personal use;
  • The exporter or agent should obtain the necessary documents from the carrier;
  • The goods will be released from customs control for exportation once all the licenses and certificates have been obtained.

 

 

 

 

 

 

Documents to be submitted

An export declaration form must be prepared in triplicate and submitted to Customs with the payment of clearance fee and processing fee of 1% on the invoice value.

 

The export declaration form must include the following documents:

  • Invoice
  • Bill of lading or Air waybill
  • A certificate of origin (where a WTO rate is applicable) or ETLS generalized system of preference certificates of origin (where a preferential rate is applicable).
    • GCCI issue certificates of origin at D5,000 (members D2,000) per bill of lading.
    • MOTIE issue ETLS certificate at no cost
  • Packing list
  • Tax Identification Number (TIN)
  • For Food Items you are required to obtain licenses and certificates relevant regulatory agencies.
    • Export and Health certificate from FSQA for food items.
    • Phytosanitary and Fumigation certificate from the Plant Protection Services of the Ministry of Agriculture is required for all export of foodstuff and quarantine goods.

 

  • The certificate costs D750/20ft and D1,500/40ft container for each certificate

 

Who are the regulatory agencies involved?

The exportation of certain goods requires Licence/Certificates from the following:

  • NEA
  • Medicines Control Agency
  • FSQA
  • Plant Protection Services
  • Forestry Department
  • Ministry of Trade, Industry, Regional Integration and Employment
  • GCCI
  • Other Government Agencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.5Infrastructure Services

These are the basic services provided by the country in order to facilitate business activity, production and consumption.

3.5.1  Port Operations

The port of Banjul is a natural port located strategically in the south-western coast of The Gambia. It is managed by the GPA, which was established as a public port in 1972. Currently a service port, it handles approximately 100,000 twenty-foot equivalent units per year.

 

Imports

Clearance documentation procedure:

  • Purchase of delivery order form from rating office at the document handling centre;
  • Delivery order form completed and stamped by the shipping agent (agency fee charged);
  • Delivery order form and Bill of lading presented to the rating office for verification and payment of shore handling charges;
  • Payment of freight levy to Gambia Maritime Administration;
  • Delivery order form signed and the issuance of a gate pass to release cargo;
  • Scanning of cargo;
  • Gate clearance and delivery

 

Exports

Clearance documentation procedure

  • Booking with the shipping agent to accept cargo
  • Purchase of shipping note from the Rating Office
  • Shipping note stamped by the shipping agent
  • Payment of shore handling charges at the rating office
  • Payment of freight levy to Gambia Maritime Administration
  • Processing of equipment interchange report (EIR) form at the export terminal for allocation of empty container by the shipping agent for stuffing. Stuffing is done outside the Port;
  • Health certificate required for foodstuff or quarantine goods;
  • Payment of freight charges to the shipping agent;
  • Cargo and shipping note presented at the entry gate;
  • Stamped original shipping note retained by the rating office;
  • Duplicate retained by the delivery and documentation office;
  • Triplicate retained by the export and transit unit;
  • Shipment of cargo.

 

Shore Handling Charges

 

Containers:

  • GMD750 per 20ft
  • GMD1,500 per 400ft

 

Bulk and General Cargo:

  • Direct delivery; GMD15 per metric ton
  • Stacking before delivery; GMD30 per metric ton

 

 

 

Vehicles:

  • Salon Cars; GMD500
  • SUV & 4x4; GMD500
  • Trucks & other vehicles; GMD750 upwards
  • Trailers, Plant and Equipment; GMD 31 per cubic metre/metric tonne

 

Rent Charges

 

Containers

Containers are given 7 working days grace period, after which, rent is charged as follows:

 

20ft Containers

  • First Period (5 working days): GMD3,600
  • Second Period (5 working days, after the first period): GMD7,200
  • Third Period (5 working days, after the second period): GMD10,800

 

40ft Container

  • First Period (5 working days): GMD7,200
  • Second Period (5 working days, after the first period): GMD14,400
  • Third Period (5 working days, after the second period): GMD21,600

 

Vehicles

Vehicles are given 5 working days grace period, thereafter, rent is charged as follows:

  • First period (5 working days):
  • Salon Cars: GMD375;
  • SUV & 4x4: GMD563;
  • Trucks & other vehicles: GMD750-upwards;
  • Beyond the first period of rent, charges are applied.

 

Trailers, Plant and Equipment

  • First period (5 working days): GMD62 per cubic metre/metric ton;
  • Second Period (5 working days after the first period): GMD124 per cubic metre/metric tons;
  • Beyond the Second period of rent, charges are applied.

 

Other Charges

 

Scanning Fee:

  • Containers (40ft and 20ft): USD80
  • Vehicles: USD20 per vehicle

 

Freight Levy:

Freight Levy is charged by Gambia Maritime Administration on Imports and exports except for agriculture and seafood products.

  • Containers:
  • 20ft: USD10
  • 40ft: USD20

 

Bulk Cargo:

GMD10 per ton

3.5.2Food Safety

FSQA is responsible for the overall control of food safety and quality in the country. It carries out inspection, sampling and certification of food and feed for import and export when required.

 

Food Exports:

  • All foodstuff bound for export must first be tested for aflatoxins and other parasites by FSQA before a health certificate is issued. Testing is currently done overseas at exporter’s own cost;
  • All exporters of food and feed must obtain a registration form from FSQA and submit a completed form;
  • Exporters must submit plans showing layout of their premises / establishments;
  • Exporters are also required to submit a full HACCP plan[6] including all the necessary pre-requisites to the FSQA for their consideration;
  • If everything is in order, the establishment will be audited for approval;
  • Once approved, the FSQA will issue the establishment with a unique approval number (for exports to the EU, approval number must appear on packaging and export documentation);
  • The FSQA will then notify the relevant competent Authority in the importing country that the exporter is approved.

 

Food Imports

  • All importers of food and feed are obliged to obtain a registration form from FSQA and submit a completed form.
  • Food Safety and Quality Act 2011 requires all food business operators to be licensed;
  • Importers of food arrange for inspection of the premises and facilities by FSQA;
  • Based on the result of the inspection, FSQA will approve the issuance of a license / permit to operate a food business under specified conditions;
  • For each consignment, licensed importers must submit to FSQA an import declaration form at least 21 days before arrival of food;
  • Upon arrival, the importer provides the following documents of the consignment for FSQA to take the necessary action before allowing entry of consignment:
    • Certificate of origin;
    • Certificate issued by the Food Safety Competent Authority of the exporting country.

 

 

 

3.5.3Electricity Supply

This topic highlights the procedures required for a business to obtain a permanent electricity connection.

 

Submit application to NAWEC and await site inspection.

One fills out an application and attach a copy of the business registration, a location plan of the property (can be sketched by self) and indicate the number of the pole nearest to the premises. An initial deposit has to be made but usually deducted from the total connection cost.

 

Receive site and internal wiring inspection by NAWEC and await estimate:

NAWEC conducts a survey of the site. The survey usually involves a surveyor visiting the premise and making an estimate. Someone from the applicant’s party has to be present at the time of the inspection.

 

NAWEC provides customer with a list of prequalified electrical contractors. When one applies for a service that would require an extension of poles or transformer, NAWEC provides a list of prequalified electrical contractors. One would then contact these contractors directly. Usually, customers contact more than one contractor for a quotation and in most cases, go for the lowest price.

 

Await completion of external works by prequalified contractor:

The pre-qualified contractor hired by customer purchases all materials and conducts all external connection works. When hired, the contractor gives a quotation to the customer with all costs included.

 

Receive site inspection, meter installation and electricity flow from NAWEC:

Once the meter has been installed, electricity should start flowing. It is the responsibility of the customer’s electrician to ensure that electricity is flowing by connecting the internal and external wirings.

 

 

 

 

 

 

 

 

 

 

 

3.6Investment Facilitation

GIEPA is the national agency responsible for the promotion and facilitation of private sector investments into The Gambia. As investors’ first point of contact, GIEPA provides information on relevant procedures for setting up a business and helps form the necessary network of contacts in The Gambia for successful business operations.

 

Key functions centre on promoting the exportation of Gambian goods, developing and regulating the country’s business park, formulating investment promotion, export and enterprise development strategies.

 

3.6.1Special Investment Incentives

GIEPA is responsible for administering incentives to investors on behalf of Government. To access incentives, an investment threshold of US$100,000 and US$250,000 from domestic investors and foreign investors respectively is required.

 

The following documents must be submitted in order for GIEPA to properly assess and determine the eligibility of a project for the award of either a Special Investment Certificate (SIC) or an Export Processing Zones License (EPZL):

  • Completed SIC/EPZL application form,
  • A detailed business plan/feasibility study document
  • A copy of Certificate of Incorporation
  • Copies of the company’s Articles of Association and Memorandum of Association
  • A copy of the Business Registration Certificate
  • A copy of Tax Identification Number (TIN)
  • Evidence of investment not less than US$100,000 or US$250,000
  • Profit & Loss projections for the duration of the SIC/EPZL
  • Certificate of registration as an employer
  • Certificate of Trade License
  • 5-year list of capital goods to be imported annually for the purpose of the enterprise
  • A manpower development plan
  • A technology and knowledge transfer plan, if applicable
  • Operational Licenses
  • Evidence of land ownership (title deed/5-year rental agreement/land lease contract)
  • Other sector licenses and permits should include
  • Food Safety and Quality Authority Registration (for Food processors and vendors only)
  • Environmental Impact Assessment (if applicable)
  • Fisheries Licenses (Fishing and Fish processing companies)

 

 

 

 

 

 

 

3.6.2 Domestic Investment Incentives

Domestic investors established in the Agriculture, Fisheries, and Energy priority sectors that invest D1 million can be eligible for certain tax incentives once they are able to:

 

  • Satisfy that it has employed at least five Gambians, three of whom are in skilled positions;
  • Submit a business and staff development plan that is acceptable to GIEPA;
  • Keep proper accounts; and
  • Submit annual audited accounts to GIEPA and GRA

 

Domestic investors who invest D2 million in the Technology priority sector or in research and development can be eligible for tax incentives if they:

  • Have a skills development program that hire and trains Gambians in the IT sector;
  • Employ at least 10 Gambian engineers, software developers or other IT staff;
  • Submit a business and staff development plan that is acceptable to GIEPA;
  • Keep proper accounts; and
  • Submit annual audited accounts to GIEPA and GRA.

 

3.6.3MSME Investment Incentives

Domestic investment enterprises that are wholly owned Gambian start-ups established in the priority sectors, can be exempted from income tax and municipal taxes for five years if they

  • Obtain a domestic investment certificate; and
  • Comply with the requirements of the SWR for filing tax returns.

 

 

 

 

[1] Source: WTTC: Travel & Tourism Economic Impact 2018 Gambia; UNWTO Tourism Highlights 2017; WEF Travel & Tourism Competitive Index 2017 Edition

                

[2] Draft Labor Act of 2019

[3] Legally, all land is public land. This include all state land (Banjul and KMC) and designated state land (Kombo North, Kombo South and Kombo Central) that is not yet recorded or registered to third parties.

  • [4] Licenses Act (Amendment of Second Schedule, Part A) Order, 2010 (BCC License Fees)
  • Licenses Act (Amendment of Second Schedule, Part B) Order, 2011 (KMC License Fees)
  • Licenses Act (Amendment of Second Schedule, Part C) Order 2012. (BAC License Fees) These Schedules are available at the Gambia Printing and Publishing Corporation.

 

[5] Annual Taxable Income from the 2nd to 5th bracket multiplied by the tax rate

[6] A HACCP plan is a food safety monitoring system that is used to identify and control biological, chemical, and physical hazards within the storage, transportation, use, preparation, and sale of perishable goods. It also determines critical control points (CCP) in the process of food production